Monday, August 13, 2007

Blame EU For Rising Milk Prices

The increased prosperity of China have led to a sharp increase in Chinese consumption of dairy foods. And while local production is soaring, so is imports. China's increased imports of dairy products have now led to sharply increasing milk prices in Germany, a large exporter of dairy products. This in turn have of course led to angry consumers in Germany. But these consumers shouldn't be angry at China. They should be angry at the EU and its farm policy.

The natural response to this increased demand would of course be for German farmers to raise more cattle and so increase milk production. But as is pointed out in this story, the EU and its quota system forbids farmers from increasing production by more than 0.5% per year until 2015, when the quota system will finally be ended. This proves for the umpteenth time the insanity and evil of farm subsidies which not only cost tax payers a lot of money, makes consumers pay more and even hurts most farmers.


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